I was thinking about this today after a meeting I had with 2 recent networking connections, both of whom I really am looking forward to working with over the next few years – Vafa Taleban and Paul Fyfe, so thanks for your inspiration both of you.
So where did my journey start and how will this be of value to anyone starting their life as a business owner or who maybe a year or two down the track? Well, let’s see, shall we.
I started a “conventional” business in 1987, and I want to cover what happened over the first two years and the lessons we learned, but first lets go back to 1982 quickly as what happened in these first 5 years will also add some value. So in 1982, I got involved in network marketing, and it was the personal development programme and the relationships I built with successful or success minded people which really helped me, so if you are just starting your life as a business owner or within the first couple of years – or more – my advice to you is get into a personal development programme and get a mentor – someone who believes in you who can help and guide you along the way, but please choose carefully.
So fast forward to 1987. I started my Advertising business on September 4th 1987, with no money, but a desire to want to build my own business. Through contacts I had met since 1982, an Advertising business was formed and I bought a distributorship in a very early form of what we know today as digital advertising. It was a Del Boy and Rodney moment – “This time next year we will be millionaires”. It was a totally new service and through sheer naivety, we ploughed head first into it. My father thought I had lost the plot as my wife was 3 months pregnant with our first daughter. There is never a right or wrong time, right?
I had a business partner back then – seriously think about going into business with someone else (There’s another lesson), and we knew the PA to our Bank Manager and Kath trusted us and knew we would not run away from our responsibilities. We had no money to fall back on, so were totally reliant on an overdraft. At the end of every month for the first 12 months, we would ring Kath and ask her to top up the overdraft by £2000, so end of 12 months, we were £24000 in debt. Its a really good idea to have a float to start a business as topping an overdraft up every month would probably not work today.
At the end of month 12, me and my business partner had a serious chat about how we move forward from there. We were selling but not enough and we were struggling to get renewals. So we had to really seriously look at out target market and what we were charging. At the end of year two, we had a better year and had a different more reliable client base and we hadn’t had to extend the overdraft, but we had another problem – the Franchisor (for want of a better word) had gone out of business for £2 million, so we had a business that was starting to work but we had no one to master and produce the adverts on to these rather large microchips. As luck would have it, we had sold to one of the local bus operators and they rang us and said they had a number of large posters at a couple of bus stations that they didn’t want to sell anymore and would we be interested, so we grabbed the opportunity. We didn’t have a lot of choices, but it was the same industry, but just a different service. We had to learn about the outdoor advertising industry and in less than 3 months we knew pretty much all we needed to know to turn that business into a £1 million + a year business over a 33 year period and take it right through to sale – the last 12 years, I ran the business on my own but had built a great team around me.
What other lessons did I learn during those first 2 years? Don’t try and be all things to all people. Do what you are good at and outsource everything else. Dont employ people without the help or a professional HR person. Make sure you have IT support in place. Get a book-keeper to do the accounts. Keep a check on costs. Know how profitable each service is you sell – you must know if you are making money and you must know how much your overheads are each month. Review costs regularly. Put systems and processes in place.
You know, most business owners have no idea how to run a business properly, or if they do have an idea, they still try and do it all themselves. They think if they are working 70 or 80 hours a week that they have a good business – they don’t. Its about balance. Do what you are good at and get help for everything else. Stop looking at outsourcing as a cost and look at it an an investment. We should all run a business as if we were going to franchise that business – then we would do things differently – read The E Myth Revisited by Michael Gerber.
Why would you start a business without thinking about selling that business at the end of your journey? I have heard people say you need an exit plan on the day you start a business. I don’t personally know anyone who does. I think that comes later, but again you cant make a decision to sell a business today and sell it next week. That journey for me alone was 10 years from the time I made the decision to ending a 3 year earn out, so you need to plan and plan all the time. Your plan will adjust. You need to adapt and change with the times.
So many lessons are to be learned and I am sure this is only a few of them. No one teaches us how to run a business and to do it properly. It takes trust in someone but we all need someone to follow to guide us along the way – someone who has been there, and got the T shirt. Let me be that person. It will be worth it. We will go on that journey together.
This article was first published on LinkedIn by Richard Knight on 12/07/2020